Altus Group recently released data on new condominium apartment sales in key Canadian markets, including the Greater Toronto Area (GTA), Greater Golden Horseshoe (GGH), Edmonton, Calgary and Vancouver, for 2017.
Last year, the GTA was by far the hottest housing market in the country for new condominium apartments with a record 36,429 units sold. The GTA saw the largest increase in buying activity across Canada with sales climbing 25 per cent year-over-year, a difference of 7,297 units. Despite an increase in the number of new units brought to market by developers last year, the pace of sales exceeded new supply. As a result, available inventory fell to its lowest level since Altus Group began tracking the market, which prompted rapidly increasing prices.
The GGH also saw strong sales in 2017 with a combined 3,467 new condominium units sold last year, although the total fell eight per cent compared to 2016 levels. Hamilton and Kitchener-Waterloo remain the two largest new condo apartment markets in the GGH regions surrounding the GTA with 783 and 1,257 units sold, respectively.
New condominium apartment sales in Edmonton soared over 60 per cent higher in 2017, the largest percentage growth of the markets tracked, with 1,289 units sold. This significant jump largely took place in the downtown core, where the new Rogers Centre attracted home buyers to the city and helped increase sales by 160 per cent year-over-year. Edmonton’s suburban areas were still dealing with a large supply of inventory and sales remained relatively flat compared to 2016.
In Calgary, there were 2,083 new condominium units sold last year, an increase of 42 per cent compared to 2016 levels. After two years of declines, buyers are returning to the Calgary market but unlike in Edmonton, it was the suburban regions of the city that saw stronger increases.
While other key markets in the Altus Group data saw sales in the new condo market either exceed or fall only slightly below 2016 levels, Vancouver was an outlier last year with a significant decline in overall unit sales, impacted by the sharp fall in new condominium supply coming onto the market. However, the 10,939 condominium apartment units sold in Vancouver last year represent a 90 per cent sales rate of all new inventory introduced into the market in 2017. Vancouver is the tightest new condominium apartment market in Canada and sales levels are not reflective of underlying demand, which remains strong.
“The sales activity across the country indicates that demand for new condominium apartment product was very strong in 2017, but particularly in the GTA,” said Matthew Boukall, senior director at Altus Group, in a press release. “While we expect to see some moderation in the GTA sales volumes in 2018 given price escalation in recent years, rising interest rates, tighter lending criteria and additional mortgage stress testing, strong demand in Vancouver and Calgary is expected to push new condominium apartment sales higher, provided a broader range of affordable product can be brought to market.”
Altus Group also studied 2017 figures to compare what home buyers with a budget of $500,000 could afford in the downtown areas of various housing markets across Canada. Their results found that consumers have considerably more buying power in smaller housing markets such as Calgary, Edmonton and Kitchener, versus the larger markets in Vancouver and Toronto.
For example, potential buyers looking to purchase a home in Kitchener would be able to find a two-bedroom unit over 1,000 square feet. In Calgary and Edmonton, two-bedroom units ranging from 850 to 1,000 square feet in desirable neighbourhoods could also be purchased for that amount. In the Toronto market, however, buyers would be able to use that money towards a one-bedroom unit sized at only 430 square feet, but in Vancouver, nothing was available at all at this price point in the downtown core. Home buyers in this region would have to visit nearby markets, such as Burnaby, to find a one-bedroom condo unit at this price.